Lexington, KY - Quiz question: How is the leadership style of Louis Gerstner different from that of Lee Iacocca? These leaders facilitated two of the most dramatic corporate turnarounds of the last quarter century. They brought life to a pair of staid, behemoth companies by following somewhat different paths.
The charismatic Iacocca was famous for his vision of a new Chrysler Corporation based on energy-efficient minivans and K-Cars. While making tough choices, he took his vision to the United States Congress to ask for loan guarantees to ensure short-term solvency. Surviving the brush with bankruptcy, he challenged employees to get on board and create an automobile company of which they could be proud. Iacocca's affable, charismatic style won over employees and consumers alike, bringing unimaginable success.
In the early days of the concept, a charismatic individual was considered to be "endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities." We currently define such an individual as one with a strategic vision who can generate an emotional bond with others to meet challenging goals.
John F. Kennedy's vision and challenge of putting a man on the moon by the end of the 1960s, in just eight and a half years, is a superb example of charismatic leadership. This easily understood, measurable and yet difficult goal renewed interest in science, engineering and education. It energized the nation.
The dark side of charisma
Charisma is a powerful force. It motivates people to meet a challenge, to create unprecedented works. As with all power, it may be used for the benefit of all involved - or not. Because of this, many people fear charismatic leaders.
Think Adolf Hitler or Jim Jones. The destruction Hitler wrought needs no exposition. The lesser-known Jim Jones convinced 908 people to commit suicide along with him in Guyana in 1978. It is no wonder that some people fear charismatic individuals.
While our emotional attachment to a charismatic individual may motivate us to achieve high performance, it does not provide the nuts and bolts details necessary to define the path from where our footsteps are today to where they must be to reach the goal. This attention to detail is what is called operational leadership and is a necessary component to achieving a goal.
Jim Collins, author of the remarkable work Good to Great, feels that charismatic leaders can actually prove detrimental to an organization's performance. So-called rock star CEOs may bring so much attention and energy to themselves that it detracts individuals from focusing 100 percent of their effort toward the success of the organization.
Let's go back to Lee Iacocca for a moment. During the first half of his tenure at Chrysler, the stock rose almost three times more than the market. As he lost focus during the second half of his tenure, the stock fell 31 percent behind the market. There is no question that Iacocca's charisma as well as attention to detail and operations saved the company, however he failed to create a sustainable company.
Another useful example for us is that of Steve Jobs, CEO of Apple Inc. While Jobs has envisioned and created phenomenal products as well as value for Apple shareholders, his charismatic leadership style could additionally be described as enigmatic and mercurial.
His persistence and charisma attracts talented individuals like mosquitoes to a bug light. People buy into the vision of creating "insanely great" products. However, his abusive personality has left a wake of former Apple employees creating products for other successful companies.
The early days of Apple were heady, yet chaotic. Operations were a disaster. Project planning and discipline simply did not exist, and programs faltered. The iconic Lisa desktop computer and handheld Newton products were non-starters. The Macintosh succeeded only after the introduction of the PageMaker desktop publishing package and LaserWriter printer. Apple's domination of the personal computer market slid to single digits as Microsoft Windows became the desktop standard.
And so we clearly see the advantages of charismatic leadership. People are motivated by the vision, by the chance to be a part of something great. They rise to the challenge when prodded. But charisma alone cannot bring about success.
Getting back to Louis Gerstner, let's take a look at his leadership style. He became CEO of IBM on April 1, 1993, as it approached the edge of a financial cliff. Sales were faltering, developers were out of touch with customers, and bureaucracy was strangling operations. Industry analysts, customers and worried employees held their breath, waiting to hear Gerstner's vision for a new IBM. At a July press conference, word finally came: "...the last thing IBM needs right now is a vision."
Gerstner wanted to restore the company to profitability by serving the customer. He didn't have any charisma or grand vision, but he did return IBM to a thriving, vibrant technology company by tackling the operations.
So let me be clear: Charismatic leadership will get you on the journey, but operational excellence will see you each step of the way to the goal.
Joel DiGirolamo is the author of Leading Team Alpha and heads the firm Turbocharged Leadership (www.turbochargedleadership.com).